SAVOY, Ill. — With estimates for the lowest price for soybeans and the lowest yields for corn in five years in Illinois, University of Illinois ag economist Gary Schnitkey predicted 2019 losses on both crops for most of the state’s farmers at the university’s Agronomy Day Aug. 22.
Looking ahead to the corn and soybean profitability for next year, he predicted a small profit in 2020 for corn and a smaller loss for soybeans than this year.
“There’s obviously a lot of variability,” Schnitkey said.
Even with the challenging spring and ongoing uncertainty in trade, his predictions in late summer are very similar to what he predicted at the 2018 Farm Economics Summit in Champaign Dec. 21, 2018.
For his calculations this summer, he used the price of $8.50 per bushel for soybeans in 2019 and $9 in 2020. In 2013, the price was $13.35.
Considering a yield of 55 bu./acre this year and current input costs, the loss would be $65 per acre for soybeans this year and a loss of $8 per acre in 2020, with slightly higher yields projected.
“Corn looks more profitable than soybeans, but not a lot,” he said.
Schnitkey is projecting the “farmer return” of minus-$43 per acre for corn this year and a profit of $13 per acre next year. In determining those figures, he expected $3.70 corn this year and an average of $3.90 next year.
Schnitkey’s calculations assume 195 bu./acre yield for Illinois corn this year, lower than the lowest yield in recent years of 197 in 2013, and considerably lower than 237 last year.
Farmers will have a better chance of profit this year with the help of the 2019 Market Facilitation Program (MFP) payments, which were not expected when predictions were made in December last year.
The payments continue to be an uncertainty for 2020 as a trade war with China lingers.
Comparatively, 2018 was a good year for many farmers. With good yields, many locked in some profitable prices early in the year and got the benefit of the MFP for trade hardships.
Schnitkey said in December, “We are thinking incomes will be relatively good in 2018.”
In 2018, if farmers locked in good soybean prices and received MFP payments, some earned about $10.20 per bushel. That, combined with a good yield, made it a profitable year for many, he said.
His December predictions for 2019 to not be so good appear to be proving true. At that time, he said it would likely be difficult to lock in prices as high as 2018 and yields may not be as high.
With increased input costs and possibly lower yields, he said income projections for 2019 were bad news. At trend yields, the projection of average farm income in 2019 was a loss of $60,000, he said in December.
At that time, he had encouraged farmers to build up working capital, talk to landowners to ask for lower cash rent prices and watch for input cost savings to help them get through 2019, which he said he expected would be a challenging year.
Despite the challenges this year — some expected and some unique — and the expected incomes of 2019 likely taking a hit, Schnitkey ended his conversation with farmers at the August Agronomy Day with a little hope.
“Perhaps there will be a rebound in 2020,” he said. “We’ll see.”